The latter half of the bear market is a transition phase. It doesn’t necessarily keep making new lows—instead, it spends more time building a base, with maneuvers performed in plain sight while others are quietly carried out behind the scenes. Be careful if you’re shorting: compared with mid-May to the end of June, there have already been major changes. The adjustment from mid-May to the end of June was the result of a combination of factors, including concerns about policy uncertainty in the market after the Federal Reserve changed leadership, Japan’s rate hikes, and more. When July arrives, Warsh has already shown a style of appearing hawkish while being secretly dovish. The June nonfarm payrolls didn’t just shatter expectations for Federal Reserve rate hikes from October to December—it also violently kicked open the door to rate cuts in the second half of the year. This jaw-dropping reversal has already laid the groundwork for the coming alternation between bear and bull cycles.

Many friends always think that in a bear market you must only short, and they take shorts without setting stop-losses—then, once they get trapped, they panic and lose control. For example, on 7.2, ETH suddenly jumped from 1596, directly breaking through from 1700 to 1722. The take-profit point I gave for the long side was 1672, and the defense point I gave for the short at 1672 was 1689. Some people, however, didn’t set it in advance. Just think about how “cheap” that defense is—it lets you control the initiative when shorting from above. But if you get trapped from the start, then as long as it keeps rising for two consecutive days, you’ll be locked in passively and it becomes dangerous—then the game afterward has nothing to do with you. When others are taking profits, you can only wait to be able to unwind your position, and the gap is huge. So, won’t shorting in a bear market never lead to losses? If it doesn’t keep moving lower, won’t you be doomed? After all, from the perspective of a bull market, the current levels are all at the bottom.

Of course, on the road to a rebound, your defense also needs to be carried along. For example, if the day breaks below the previous day’s low, then you should step back to the low from two days ago before entering again.